Here are a few tips for navigating cross-border deals!
Ask - Can you operate or sell overseas? 🌐
If you want to sell a product or service overseas, you must find out whether you are permitted to do so under the laws of your business's home country. Sanctions and export laws can apply and violating these laws results in severe penalties such as imprisonment and millions in fines.
If you want to operate overseas, you also need to comply with those country's local regulations and standards. Are you prepared for the fallout if you can't comply?
2. Define the Commercial Engagement 💱
Currency - fluctuating exchange rates can impact profit margin! Define what currency you will be paid in!
Banking fees - every bank might have different fees for international payment. Make sure you know who is responsible to pay for those!
Tax - cross-border transactions have tax implications. Seek guidance from financial advisors to optimize your position and ensure compliance.
3. Contracting - Choice of Law and Jurisdiction⚖️
When you transact with clients in a different country, ask yourself which country's laws should apply to govern the contract? Where should litigation occur?
The answer requests careful consideration of the different legal systems between the two countries, how contract laws might be applied, and whether these elements align with your business interests. If you own an Australian business, there can be a tendency to make everything align with Australian law and Australian courts. But this might not actually work in your favour!
4. Dispute Resolution 🤝
When a relationship sours, going to court shouldn't be the next logical step as it requires massive investment in time and effort. How might a documented dispute resolution mechanism work in your favour? Will the parties undergo formal negotiation or mediation?
It is also worth considering arbitration as an alternative to litigation. It offers enforceability in multiple jurisdictions, and confidentiality, making it well-suited for international disputes.
5. Cross-Cultural Communications:🤝
Make sure your team understands and respects differences in communication styles, negotiation tactics, drafting and business etiquette! In some countries, a "yes" can mean a "no" so sensitivity is key to closing successfully!
6. Finding the Right Lawyer👩⚖️
Having a legal partner who understands, not only the laws of where your business is located, but also where you want to expand to will be invaluable to you. As a bonus, they should also be skilled in legal project management across multiple jurisdictions to bring you tailored solutions that work internationally.
Pongan Legal is committed to helping businesses grow in the Asia-Pacific region.
Need guidance on a particular cross-border transaction?
Don't hesitate to reach out.
For any inquiries or guidance, please don't hesitate to contact Pongan Legal
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